The use of small unmanned aircraft systems (“sUAS” or, colloquially, “drones”) is becoming more prolific in our society. In the oil and gas context, drones can play a key role in conducting risky oilfield operations. The uses for drones in the oil patch are limitless--(i) inspecting miles of pipeline for leaks in remote or mountainous areas; (ii) surveying offshore platforms in the Gulf of Mexico for damage; (iii) monitoring oil spills/breadth of the oil plume at rig sites; (iv) flying over oil rig flare stacks; and (v) detecting gas emissions.[1] In this way, drones can allow oil and gas companies to save money and operate efficiently and safely. This legal update will provide a high-level overview of the new drone regulations issued by the Federal Aviation Administration (“FAA”) on June 21, 2016.[2] The promulgation of these regulations is groundbreaking because it marks the first time that the FAA has formally recognized the need for government oversight of the operation of small unmanned aircraft and has fashioned a regulatory framework to fit that need.

Until recently, the FAA did not have a comprehensive regulatory scheme to govern the use and operation of drones in the national airspace. Instead, people or companies wanting to use drones had to seek a “Section 333 exemption” from the FAA, which was reviewed and granted on a case-by-case basis. In 2012, Congress passed the Federal Aviation Administration Modernization and Reform Act (“Act”). Section 333 of the Act authorized the FAA to create regulations relating to the operation of drones.[3] Specifically, it directed the Secretary of Transportation to determine whether certain unmanned aircraft systems could operate in the national airspace system and, if so, then the Secretary was to “establish requirements for the safe operation of such aircraft systems in the national airspace.”[4] With the issuance of the new final rule, “Section 333 exemptions” are no longer needed or available.

In February 2015, the FAA issued a notice of proposed rulemaking and received over 4,600 comments in response. After reviewing and considering the comments, the FAA issued its final rule on June 21, 2016. The final rule was published in the Federal Register on June 28, 2016 and will be codified in Title 14 of the Code of Federal Regulations as Part 107. The effective date of the new regulations is August 29, 2016.

The final rule recognizes that drones will be used by a number of industries for various purposes and, thus, it establishes a uniform set of requirements for persons or companies seeking to operate drones in a commercial setting. For instance, the new regulations cover the following types of operations:

·Crop monitoring/inspection;

·Research and development;

·Educational/academic uses;

·Power-line/pipeline inspection in hilly or mountainous terrain;

·Antenna inspections;

·Aiding certain rescue operations;

·Bridge inspections; and,

·Aerial photography and wildlife nesting area evaluations.

As for actual requirements, these regulations apply to drones that weigh 55 pounds or less. All drone operations must be performed during daylight hours or civil twilight hours (30 minutes before sunrise or 30 minutes after sunset) with appropriate anti-collision lighting. While being operated, the drone must be within the visual line of sight of the remote pilot (i.e., person operating the drone). This means that the unmanned aircraft must remain close enough to the remote pilot such that the pilot can see and avoid other aircraft and such that the drone can be seen by the pilot without the aid of any device, except glasses or contacts. A drone may not operate (i) over any persons not directly participating in the operation, (ii) under a covered structure and (iii) inside a covered stationary vehicle.

One big concern with having unmanned aircraft operating in the same airspace as manned aircraft (e.g., commercial passenger airplanes) is safety. The FAA took care to craft regulations that would prevent mid-air collisions between manned and unmanned aircraft. For instance, a drone must yield the right-of-way to other aircraft. The maximum altitude for a drone is 400 feet above ground level or, if higher, within 400 feet of a structure. The maximum groundspeed is limited to 100 mph (87 knots). The final rule also prohibits operating a drone from a moving car (unless in a sparsely populated area) or a moving aircraft.

The new regulations also require that drones not be operated carelessly or recklessly. A drone cannot carry hazardous materials and a pre-flight inspection must be conducted by the remote pilot to ensure that the drone will not violate any state or federal laws. A person may not operate a drone if he or she knows or has reason to know of any physical or mental condition that would interfere with its safe operation. External load operations are allowed but only if the object being carried by the drone is securely attached and does not adversely affect the flight characteristics or controllability of the drone.

The final rule also establishes certain operator certification requirements and responsibilities. In order to operate a drone, a person must either hold a remote pilot airman certificate with a drone rating or be under the direct supervision of a person who holds a remote pilot certificate. To qualify for a remote pilot certificate, as person must demonstrate aeronautical knowledge by either: (a) passing an initial aeronautical knowledge test at an FAA approved knowledge testing facility or (b) hold a Part 61 pilot certificate, complete a flight review within the prior 24 months, and complete a small drone online training course. The cost to receive the certification is about $150. A candidate also has to be vetted by the Transportation Security Administration (TSA) in the interest of national security. All drone pilot candidates must be at least 16 years of age or older.

Once a remote pilot certificate has been obtained, the pilot must make available to the FAA, upon request, the drone itself for inspection and testing, and any associated documents/records required to be kept by law. A pilot must report to the FAA, within 10 days, any operation that results in serious bodily injury, loss of consciousness or property damage of at least $500. A pilot must also conduct a preflight inspection, including specific aircraft and control station systems checks, to ensure that the drone is in proper condition for safe operation. A pilot must also ensure that the drone complies with the existing registration requirements specified in 14 CFR § 91.203(a)(2). An FAA airworthiness certificate is not required to operate a drone, but the remote pilot must conduct a preflight check of the drone to ensure that it is safe for operation.

No doubt the oil and gas industry is poised to take advantage of drone technology pursuant to the FAA’s new regulatory framework in short order. It is no secret that drone technology has outpaced the development of federal and state laws regulating the use of such aircraft. State legislative efforts in Louisiana, for instance, have focused mainly on privacy considerations or criminalizing the unlawful use of drones instead of safety or orderly use concerns.[5] To date, Louisiana legislators have not really focused on the commercial use of drones, except for a few efforts in 2015 relating to drones used in precision agriculture.[6] However, with the new federal regulatory scheme in place, local legislative efforts will likely kick into high gear, especially in states like Louisiana where the energy and agricultural industries--pillars of the state’s economy—have come to rely on the use of drones. Interesting developments in this area of the law are afoot. Stay tuned.

Colleen C. Jarrott was a Member of the law firm of Slattery, Marino & Roberts, APLC (2007-2016). Her practice principally focuses on civil litigation and regulatory matters concerning oil and gas law in Louisiana. Ms. Jarrott provides counsel to industry trade associations and oil and gas companies on a variety of issues. Ms. Jarrott graduated from the Catholic University of America's Columbus School of Law in 2002. There, she served on the Law Review and Moot Court. Ms. Jarrott was also the President of the Women's Energy Network for South Louisiana (WEN-SOLA) in 2013. Any questions or inquiries relating to this article can be directed to Ms. Jarrott at the law firm of Baker Donelson at (504) 566-8664 (direct) or by e-mail to cjarrott@bakerdonelson.com.

For further information, contact:

Colleen C. Jarrott

Slattery, Marino & Roberts

1100 Poydras Street, Suite 1800

New Orleans, Louisiana 70163

(504) 585-7830 (direct)

[1]See Michael Weller, Salo Zelermyer and Joshua Zive, Drones and The Oil and Gas Industry, Oil & Gas Financial Journal, February 6, 2015, at http://www.ogfj.com/articles/2015/02/drones-and-the-oil-and-gas-industry.html. Interestingly, BP was the first oil and gas company to be approved to fly a drone over its Prudhoe Bay oil field in Alaska (http://www.bp.com/en/global/corporate/bp-magazine/innovations/drones-provide-bp-eyes-in-the-skies.html).